adverse day for ATXwhich opens the session on Wednesday, December 28 with slight drops in the 0.28%until the 3,135.63 points, after opening. If we compare the figure with previous dates, the ATX puts a stop to two days in a row with a positive trend.
If we consider the data of the last seven days, the ATX accumulates an increase of 2.43%; although for a year there has still been a drop in 18.88%. The ATX a 22.72% below its maximum this year (4,057.59 points) and a 18.44% above its minimum price so far this year (2,647.43 points).
Stock indices… What for?
a stock index It is an indicator that shows how the price of a certain set of assets changesfor which it takes data from different companies or sectors of a part of the market.
These indicators are used mainly by the stock markets of the countries and each of them can be integrated by signatures with specific characteristics such as having a similar market capitalization or belonging to the same industry, also, there are some indices that only consider a handful of shares to determine their value or others that consider hundreds of shares.
Stock indices serve as indicator of confidence in the stock market, business confidence, the health of the national and global economy, and the performance of stock investments and shares of an entity. If investors are not confident, stock prices tend to fall.
They also work to measure the performance of an asset manager and allow investors to make comparisons between return and risk; measure the opportunities of a financial asset or create portfolios.
These types of indicators began to be used at the end of the 19th century after the journalist Charles H. Dow. carefully observed how the shares of the companies tended to rise or fall together in price, so he created two indices: one that contained the 20 most important railway companies (since it was the most important industry at the time), as well as 12 shares of other types of businesses
Currently in humanity there are various indices and they can partner based on their geographic location, industries, company size, or even asset typeFor example, the US Nasdaq index is made up of the 100 largest largely technology-related companies such as Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Facebook (FB), Alphabet (GOOG), Tesla (TSLA), Nvidia (NVDA), PayPal (PYPL), Comcast (CMCSA), Adobe (ADBE).
How is it calculated and how to read them?
Each stock index has its own way of calculating, but the main component is the market capitalization of each company that integrates it. This is obtained by multiplying the value of the share on the corresponding stock market by the total number of shares that are on the market.
Companies listed on the stock market are required to present a balance of its composition. Said report must be disclosed every three or six months, as the case may be.
Reading a stock index also requires noticing its variations over time. New indices always appear with a fixed value based on stock prices on their start date, but not everyone follows this method. Therefore, it can be a source of misunderstandings.
If one index adds 500 points in a day, while another only adds 20, it might appear that the former performed better. However, if the first started the day at 30,000 points and the other at 300, it can be assumed that, in percentage terms, the gains for the second were more important.
What are the major stock indices?
Between the major US stock indices is the Dow Jones Industrial Average, better known as Dow Joneswhich is made up of 30 companies, the S&P 500, which includes 500 of the largest companies on the New York Stock Exchange. Finally, it is necessary to mention the Nasdaq 100which unites 100 of the largest non-financial firms.
On the other hand, the most prominent indices of Europe are the eurostoxx 50, which covers the 50 largest companies in the euro area. On the other hand, the DAX 30, the main German index containing the most outstanding companies on the Frankfurt Stock Exchange; the FTSE 100 from the London Stock Exchange; the ACC 40 from the Paris Stock Exchange; and the IBEX 35from the Spanish stock market.
In the asian continentwe have the nikkei 225, made up of the 225 largest companies on the Tokyo Stock Exchange. There is also the SSE Composite Index, is seen as the most solid in China, made up of the most prominent companies on the Shanghai Stock Exchange. The same role played by the Hang Seung Index in Hong Kong and the KOSPI in South Korea.
Talking about the latin american regionyou have the CPIwhich contains the 35 most powerful firms on the Mexican Stock Exchange (BMV). At least a third of them are owned by tycoon Carlos Slim.
Another is the Bovespa, made up of the 50 most important companies on the Sao Paulo Stock Exchange; the Merval from Argentina; the IPSA From Chile; the MSCI COLCAP from Colombia; the IBC de Caracas, made up of 6 companies from Venezuela.
Likewise, there are other types of global stock indices such as the MSCI Latin Americawhich includes the 137 most important companies in Brazil, Chile, Colombia, Mexico and Peru.
Similarly, there is MSCI World, which includes 1,600 companies from 23 developed countries; the MSCI Emerging Markets, made up of more than 800 companies from developing countries; and the S&P Global 100made up of the 100 most powerful multinational firms on the entire planet.
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